FIN-515- Managerial Finance Week 6_Financial Planning & Forecasting_Discussion_Question_1_Answer

Apr 24th, 2015
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FIN-515- Managerial Finance Week 6_Financial Planning & Forecasting_Discussion_Question_1_Answer

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Financial Planning & Forecasting (graded) Illustrate how management focus on forecasting, planning, and business strategy can create wealth for a company in your industry.For this discussion thread, let's first focus on a company's sales forecast. How does a company come up with a sales forecast?A sale forecast needs to be performed, reviewed and compared with actual performance results on a regular basis. Conducting a sales forecast will provide a business with an evaluation of past and current sales levels and annual growth, and allow the business to compare their company to industry norms. It will also help business to establish their policies so that they easily can monitor their prices and operating costs to guarantee profits, and make them aware of minor problems before they become major problems. sales forecasting should always be based on most current sales and trends. Although the typical process to go back 5-10 years, what was selling in previous years may not result in increased sales as of current day (vice versa). I guess this would also depend on the industry the sale(s) are catering too also. Forecasting is defined as "to predict or estimate (a future event or trend)" Source: http://www.thefreedictionary.com/forecast. This means the forecast will not necessarily be accurate 100% of the time. But for certain industries forecasting has to be done for sales income and trending purposes.Here are reasons why you should make a sales forecast. - It helps you

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